Unleaded petrol price: According to the Australian Institute of Petroleum the national average price of unleaded petrol fell by 4.4 cents a litre last week to 156.1 cents a litre.

Job advertisements: ANZ job advertisements rose by 0.2 per cent in October after declining by 0.7 per cent in September. Job ads were up 3.6 per cent on a year ago.

New vehicle sales: In October, 90,718 new vehicles were sold, down by 5.3 per cent over the year. In the twelve months to October, sales totalled 1,175,908 units, down 0.6 per cent on a year ago. But SUV sales hit record highs of 498,850 units in the year to October.

Services sector: The AiGroup services sector gauge fell by 1.4 points to 51.1 in October. Despite the fall, services activity has now expanded for 20 consecutive months – the longest stretch since March 2008. The CBA/Markit services sector gauge eased from 52.2 to 51.7 in October.

What does it all mean?

The regional gasoline price has fallen 17 cents a litre from recent highs and Australia’s wholesale petrol price has so far fallen by 12 cents. So this is an indication about where the pump price is headed. The pump price has only started its decline (down 4.4 cents) and further big price declines can be expected in the coming fortnight. The average motorist may end up paying around $10 less to fill a 70 litre tank compared with a month ago.

Recent data has indicated some consolidation in the Australian economy in recent months at healthy activity levels. No doubt uncertainty about a possible trade deal between the US and China has led to a more cautious business sector. And a softening of home prices in Sydney and Melbourne has similar led to a more cautious Aussie consumer.

What do the figures show?

Petrol prices

According to the Australian Institute of Petroleum the national average price of unleaded petrol fell by 4.4 cents a litre last week to 156.1 cents a litre.

The metropolitan petrol price fell by 5.8 cents to 154.7 cents per litre, and the regional price fell by 1.4 cents to 159.0 cents per litre. The gross retail margin fell by 0.4 cents to 19.40 cents a litre.

Today, the national average wholesale (terminal gate) unleaded petrol price stands at 135.50 cents a litre, down by 2.5 cents over the week. The terminal gate diesel price stands at 148.50 cents a litre, down by 1.3 cents over the past week. The wholesale unleaded price has fallen 12 cents a litre from recent highs.

The national average diesel petrol price fell by 0.3 cents to 164.6 cents a litre over the week. The metropolitan price fell by 0.3 cents to 164.8 cents a litre with the regional price down by 0.2 cents to 164.5 cents a litre.

Last week the key Singapore gasoline price fell by US$4.60 or 5.7 per cent to US$76.20 a barrel. In Australian dollar terms, the Singapore gasoline price fell by $9.67 or 13.4 per cent last week to $105.21 a barrel or 66.17 cents a litre. Over the past four weeks, Singapore gasoline has fallen 17 cents a litre in Australian dollar terms.

ANZ job advertisements rose by 0.2 per cent in October after declining by 0.7 per cent in September. Job ads were up 3.6 per cent on a year ago. The number of jobs advertised (seasonally adjusted) was 175,905 in October, down 1.6 per cent from the 7-year high of 178,713 set in May. In trend terms job ads fell by 0.2 per cent in October to be up 3.8 per cent on a year ago.

New vehicle sales

In October, 90,718 new vehicles were sold, down by 5.3 per cent over the year. In the twelve months to October, sales totalled 1,175,908 units, down 0.6 per cent on a year ago.

The Federal Chamber of Automotive Industries reported: “The October 2018 market of 90,718 new vehicle sales is a decrease of 5,045 vehicle sales or -5.3 per cent on October 2017 (95,763) vehicle sales. October 2018 (26.4) had one more selling day than October 2017 (25.4), however this resulted in a decrease of 333.9 vehicle sales per day.”

By segment: “The Passenger Vehicle Market is down by 8,594 vehicle sales (-23.6 per cent) over the same month last year; the Sports Utility Market is up by 2,978 vehicle sales (8.1 per cent); the Light Commercial Market is up by 199 vehicle sales (1.0 per cent); and the Heavy Commercial Vehicle Market is up by 372 vehicle sales (10.9 per cent) versus October 2017.”

By brand: “Toyota was market leader in October, followed by Mazda and Hyundai. Toyota led Mazda with a margin of 9,639 vehicle sales and 10.6 market share points.”

States/Territories: NSW sales 28,575 (down by 9.2 per cent on a year ago); Victoria 26,914 (down by 4.2 per cent); Queensland 17,375 (down by 2.7 per cent); South Australia 5,533 (down by 5.1 per cent); Western Australia 8,318 (down by 1.7 per cent); Tasmania 1,876 (up by 0.3 per cent); Northern Territory 709 (down by 4.7 per cent); ACT 1,418 (down by 2.1 per cent).

AiGroup Performance of Services Index

The Australian Industry Group (AiG) Performance of Services Index (PSI) rose for a 20th consecutive month, despite falling by 1.4 points to 51.1 points in October – the longest expansion since March 2008. PSI results above 50 points indicate expansion, with higher numbers indicating stronger rates of growth.

Of note, the employment index rose by 7.5 points to 57.3 in October but average wages fell by 8.6 points to 54.7.

AiGroup notes: “The Australian PSI® indicated expansion in five of its nine sectors in October (trend). All business-oriented services sectors reported slower conditions than in September. The largest of these, business and property services, slowed but continued to report broadly positive conditions due to high levels of infrastructure construction activity. The consumeroriented services sectors were mostly positive, with hospitality (cafes and restaurants) and retail trade reporting stronger conditions (trend).”

What is the importance of the economic data?

Weekly figures on petrol prices are compiled by ORIMA Research on behalf of the Australian Institute of Petroleum (AIP). National average retail prices are calculated as the weighted average of each State/Territory's metropolitan and non-metropolitan retail petrol prices, with the weights based on the number of registered petrol vehicles in each of these regions. AIP data for retail petrol prices is based on available market data supplied by MotorMouth.

The monthly Job Advertisements release is a leading employment indicator. Employers only seek additional staff if business activity is strong, and more importantly, if they expect that conditions will remain favourable in coming months. It takes around 5-6 months for the new staff to be added to the payrolls. But a fall in job advertisements would have a more immediate impact on monthly employment estimates.

The Federal Chamber of Automotive Industries releases estimates of car sales on the third business day of the month. The figures highlight the strength of consumer spending as well as conditions facing auto & components companies.

CBA and the Australian Industry Group (AiG) release surveys on the services sector each month. The Australian surveys are the local equivalents of similar surveys released for other countries. The services sector surveys are useful not just in showing how the sector is performing but in providing some sense about where it is headed. The key ‘forward looking’ components are orders and employment.

What are the implications for interest rates and investors?

Fuel prices affect discretionary spending and transport costs so there are implications for retailers and transport operators. Pump prices are now easing, boosting prospects for a raft of retailers.

The car market has topped out near its highs, largely because sales of SUVs and utilities are just failing to cover the ongoing downturn in demand for passenger cars.

At present, CommSec expects interest rates to remain unchanged until late 2019. But we will be watching wage and price trends closely over coming months.